Rest assured that dramatic, small-business failures can be years in the making. Also comforting, is that managers might avoid some errors -- including those related to personnel -- that cause other companies to fail. One key determinant in whether such devastating errors will be averted is the choice of business leaders to either explain away employee issues or address such issues head on. Rather than be slow to react to employees with bad attitudes, it's better to confront this problem directly.

Study Recent Performance Review

Examine the past performance review documentation and make note of the specific work and personal improvement priorities that you and the employee set at the time. Check any updates related to changes in assignments to make sure you are evaluating the employee's current work and attitude using the correct criteria. Think about any aspects of the employee's performance -- positive or negative -- that affect his recent work contributions and attitude. Document the needed changes in the employee's performance and attitude that did not occur.

Conduct Review Follow-up Meetings

Use both formal and informal meetings with the employee to reinforce specific on-the-job performance and attitude goals. Stay focused on what you hope to achieve, such as more pleasant interaction with customers. Ask questions to attempt to identify the source of the employee's bad attitude. For example, ask if he understands the work he must perform. If not, you might schedule a training class. Failure to work with the employee sends the message that his needed improvement is not worth your time or that he can get away with the bad behavior. Continue to monitor the employee's behavior and document your findings. When necessary, call the employee aside and tell him you are displeased with his attitude. State the discipline that will follow if his behavior does not improve.

Provide Formal Notice

Review the company's policies regarding employee discipline. In particular, confirm that you can place the employee on probation due to his behavior and then complete the necessary paperwork to do so. Meet with the employee to tell him of the disciplinary action. This formal warning alerts the employee to the critical need for a change in attitude. Tell him that a failure to improve his attitude might lead to dismissal. At the conclusion of the meeting, provide the employee a notice of formal disciplinary action. Also, make notes of your conversation to document this latest effort to improve the employee's attitude. As before, continue to work with the employee for attitude improvement.

Meet with Human Resources

If the employee's attitude does not improve, work with the human resources department to prepare the documentation required to fire the employee. Calculate the pay and other benefits the employee is owed, including earned vacation days. In addition, make a list of assets the employee must return to the company. Also, schedule a meeting with the employee and the HR representative and reserve a secluded conference room. If appropriate, arrange with security personnel to escort the employee off the premises following the meeting. Also, create an employee termination checklist consisting of items such as collecting office keys and laptop.

Terminate Employment

When the employee arrives at the conference room, tell him he is terminated and state the reasons for the termination. Also, state that your decision is final. At this point, the HR representative should discuss any pay and benefits the employee will receive. Ask the employee to sign necessary forms and offer him the termination paycheck. Conclude the meeting with words of encouragement. The security guard should meet the employee at the conference room and escort him to collect his personal items and off the premises.

About the Author

Billie Nordmeyer works as a consultant advising small businesses and Fortune 500 companies on performance improvement initiatives, as well as SAP software selection and implementation. During her career, she has published business and technology-based articles and texts. Nordmeyer holds a Bachelor of Science in accounting, a Master of Arts in international management and a Master of Business Administration in finance.